Analysis of political party expenditure and revenue before the 8th Saeima elections

Transparency International - Latvia Delna

ABSTRACTThe analysis of political party expenditures and donors was carried out as part of the project “Transparency for the 8th Saeima Pre-election Campaign Funding”. The project made use of new legislative tools, provided by amendments to the political party funding law, to prepare an analysis of political party revenue and expenditure leading up to the elections.

In June 2002, the Saeima (Parliament) passed amendments to the party financing law, which stipulate that, one month before elections, parties must submit reports on expenditures for pre-election campaigning and must also publish a list of their donors on the Internet. This first legislative step towards greater transparency in party financing provides an opportunity to put more precise questions to parties and to look into their “workings”.

Just as in the 2001 local government elections, the leader in both expenditures and donations received before the 8th Saeima elections was still the Tautas Partija (People’s Party – TP). Latvijas Ceļš (Latvian Way – LC) came in second, but trailed behind TP both in terms of donations received, expenditure and planned expenditures, by approximately twice the total amount. This raises the question of why one party, which is ideologically close to at least two other coalition members, and works in the same economic environment, manages to raise significantly more donations every year.

For several parties there is a notable difference between the total donations received and planned expenditures. During the final period of a pre-election campaign, this can create an unnecessary dependency on donors, by trying to fulfil and fund the pre-election campaign as planned. The greatest difference was noted for LSDSP, which fell short Ls 146 002.

Political party reports before the 8th Saeima elections indicated that these elections would cost approximately 4 million for all the parties combined. This total means that, in accordance with the officially declared funding, all the parties together could spend as much as Ls 2.8 for pre-election campaigns on each constituent with the right to vote. This is a high indicator even in comparison to developed western democracies (see comparative table on pg 9).

The greatest contradictions within the advertising volume documented by the project “Transparency for the 8th Saeima Pre-election Campaign Funding” were noted for TB/LNNK, PCTVL, LPP, and ZZS. These parties indicated that they basically had not incurred any expenses for LTV and Latvian Radio, although the project data and the income of both broadcasters showed the opposite.

It was concluded by the project, while carrying out an analysis of party donors, that donor lists for some parties contained a large proportion of donations from people who do not appear in the Lursoft data base, which means that these people are not engaged in and are not involved in any kind of business. TP and ZZS had the largest proportion of such donors. During the analysis, it was also concluded that some parties received donations from legal persons or companies which in the Lursoft data base have remarks by their names, such as re-registration bans, annual reports not submitted, bans on operations and other bans. TP and ZZS also have the greatest proportion of this type of donor. The analysis also looked at the proportion of related donors on each party’s donor list. In this analysis, related donors were considered to be those who appear in the Lursoft data base as legal persons or companies which are linked by property ownership, participation in companies, ownership of capital shares etc. The largest amounts of money from related donors were received by TP and LC. The largest donations from State Authorised Representatives in state companies were received by TB/LNNK.

The usefulness of the recent legislative amendment – the declaration of pre-election expenditure and the publication of donor lists – is diminished by the parties’ lack of understanding on how to fill out the pre-election period declaration forms, and the fact that there are few institutions making use of this excellent tool, the donor lists published by parties on the internet, to analyse the activities of political parties before the elections. Hopefully, the situation will change significantly when the KNAB (Bureau for the Elimination and Prevention of Corruption), which has been tasked with monitoring political party financing from now on, begins operation.

The Lursoft data base was used to analyse political party donors. The parties analysed were selected based on their realistic chances of being elected to the Saeima, therefore the analysis includes 9 parties – TB/LNNK, PCTVL, LSDSP, JL, TP, LPP, SDS, LC, ZZS. The party expenditure declarations and donor lists were viewed on the home page of the Secretariat for the Elimination of Crime and Corruption Council, Ministry of Justice

Analysis of political party expenditure and revenue before the 8th Saeima elections
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